Rules of Evidence in International Arbitration: An Annotated Guide

420 Pages·2012·1.96 MB·English

by  Nathan D. O'Malley

RULES OF EVIDENCE IN INTERNATIONAL
ARBITRATION: AN ANNOTATED GUIDE
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LLOYD’S COMMERCIAL LAW LIBRARY
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R U L E S O F E V I D E N C E
I N I N T E R N AT I O N A L
A R B I T R AT I O N
AN ANNOTATED GUIDE
By
NATHAN D. O’MALLEY, LLM
P artner, Conway & Partners, Rotterdam
Foreword by
HIS HONOUR HUMPHREY LLOYD, QC
F ormerly a Judge of the Technology and Construction Court
High Court of Justice, England and Wales
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First published 2012 by Informa Law
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FOREWORD
BY HIS HONOUR HUMPHREY LLOYD, QC
I am delighted to have been invited to write a foreword to this work. A proper
discussion of evidence in international arbitration is long overdue.
Evidence is sometimes relegated to being a matter only of procedure, as if it were
less important than substantive law. It is of course of vital importance since in the
majority of cases the facts have fi rst to be established. Indeed, the advent of tiered
dispute resolution and the popularity of other means of minimising the possibility of
having to resort to arbitration suggests that many more of the arbitrations that take
place are about intractable matters, such as fundamental confl icts about the facts.
So a study of the rules of evidence is highly topical.
Nathan O’Malley brings to the subject the advantages of being a long-established
practitioner in international arbitration, honed by experience in a niche practice
which gives him an additional edge. He evidently has great enthusiasm and ferreted
into recherché corners. Many instructive awards have been found, some in the form
of extracts quoted in decisions of national courts which could have been overlooked.
Further insight is provided from numerous commentaries and articles. The results
have then been carefully considered and lucidly presented. This work is not only well
researched but thoughtful, stimulating and, obviously, provocative.
Evidence used to be (and of course still is) about what the arbitral tribunal needs
to know to make its decision but which it does not already know (or which it should
have confi rmed to it). Arbitrators were often people with either knowledge of the
type of subject-matter or lawyers with suffi cient experience of the sector concerned.
Others who did not have much knowledge of the law needed guidance about evi-
dence and to know when to inform the parties of their own experience—one of the
points covered by Mr O’Malley in Chapter 6. Nowadays, as the author observes,
arbitrators are mainly jurists. Most are generalists, some with limited knowledge of
international arbitration. So they need guidance of a different kind, such as being
made aware of differences between national court or arbitral practice and interna-
tional arbitration practice. This might be exemplifi ed by the use of the tiresome
phrase “the strict rules of evidence”—as if some rules are stricter than others, whereas
they are all rules. The phrase contrasts practice in courts with practice in arbitration
where historically the tribunal because of its knowledge, greater procedural fl exibil-
ity and less accountability was entitled not to operate as if it were a court.
Mr O’Malley in writing for today’s arbitration practitioners and arbitrators has
wisely structured the work around the 2010 edition of the International Bar
Association’s Rules on the Taking of Evidence in International Arbitration.
Institutional rules do not normally go into evidence in any detail. The IBA Rules
being, in essence, a synthesis of existing practice (or what should be good practice)
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FOREWORD
are an ideal basis for a discussion of the subject. The work is not only a highly
informed commentary on the IBA Rules but also thereby in the nature of a general
treatise. That can be seen both in the introductory fi rst chapter (which poses and
answers the question: are there rules of evidence in international arbitration?) and in
the second chapter which tackles three topics that are not covered by the IBA
Rules—depositions, interrogatories and “judicial notice”. Here the latter is about
facts that are well known generally (although one might question one old decision
which so classifi ed rates of interest). The former two being, in the main, United
States practices, lead to a useful discussion as to how their objectives may be achieved
by means of techniques that are part of the repertory of techniques that are estab-
lished in international arbitration.
Since most cases are decided on the basis of the documents, Chapter 3 is rightly
the most substantial. Through an examination of article 3 of the IBA Rules it covers
all the key aspects of document production. Normally a party that cannot establish
its case from its documents should consider if it has a case worth pursuing.
The avenues open to such a party are however examined in detail. For example, the
discussion of the seemingly pleonastic wording “relevant to the case and material to
its outcome” is especially illuminating, as is the treatment of the potential objections
in article 9.2.
If the documents do not establish all the facts then witnesses will be required.
They are the subject of Chapter 4. It too has many pertinent observations, eg the
extent to which a witness’s evidence might need corroboration by documents—
which might bring us back to square one. However, this ought not to lead to the vice
of a witness statement repeating the contents of a document. The advantages of
cross-examination or questioning as the means of testing if the contents of a witness
statement are really the witness’s own evidence, and are reliable, are properly
explored. The arbitrator who through inexperience or pusillanimity is inclined to
characterise an issue as a matter of law rather than one of fact should read this chap-
ter and the later chapters dealing with assessment of evidence. Events are always
recalled differently and at times arbitrators have to be able to decide what happened
without the aid of documents.
Chapters 5 and 6 deal with experts, party-appointed and appointed by the
tribunal, respectively. These chapters are of considerable practical importance. First,
the costs of experts can be disproportionate to their effect on the outcome, so the
tribunal and the parties here get instruction on how to control the work of experts.
Second, certain arbitrators, through inertia or ignorance, do not grapple with
differences between apparently confl icting opinions. Some effectively delegate their
functions to an expert, although they have been enjoined to ascertain the facts them-
selves. They will all benefi t from studying these chapters, particularly to see the
procedures available whereby points of potential confl ict can be identifi ed at an
early stage and, if not neutralised by agreement, can be presented for a decision in
an intelligible and manageable way.
Chapters 7, 8 and 9 move to the reception and treatment of evidence—how it is
assessed, the standards of proof (Chapter 7), the ins and outs of the evidentiary
hearing itself (Chapter 8) and other aspects of procedure such as dealing with objec-
tions on grounds of confi dentiality or certain types of privilege and otherwise
(Chapter 9). These chapters are full of useful material. The discussion of burden
of proof (O nus Probandi Actori Incumbit) should be particularly valuable to some
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FOREWORD
practitioners who can be much exercised by it (when in most cases all that is required
is skilful advocacy).
It is common to say that a book should be “on the shelves of every practitioner in
arbitration”. That may be too much to hope for, but I warmly commend it as an
excellent vade mecum for anybody involved in international arbitration, whether as
arbitrator, lawyer or client.
HUMPHREY LLOYD
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PREFACE
How evidence will be introduced, obtained, perceived, and weighed are matters of
concern for all lawyers who practice in the fi eld of dispute resolution. For practitio-
ners of international arbitration, it is no different. Nevertheless, while advocates
appearing before domestic courts may attain guidance on these questions from their
domestic rules on evidence, one may query as to what code those who ply their skills
in international arbitration may appeal for answers?
Today we are in a more fortunate position than previous decades, as this question
has been partially answered with the emergence of the IBA Rules on the Taking
of Evidence in International Arbitration. In the Rules one fi nds broadly accepted
standards which result from a convergence between the civil and common law
systems. It is this ever-increasing acceptance of the Rules (or at the very least the
principles found therein) which supports the conclusion that they may be relied
upon by counsel and arbitrator alike as affi rmations of correct and good evidentiary
procedure.
The above being said, the IBA Rules do not cover all aspects of evidentiary
procedure, and one may further notice that they do not provide great detail. That we
do not have a more defi ned and wider reaching code of evidence in international
arbitration may be put down to any number of reasons; a central one being an over-
arching desire to keep the process free of too many rules and procedures. Such a
rationale for keeping with the minimalist approach is valid, but, if procedural fi ghts,
or disputes generally, could be avoided by simply not having rules, then there would
be no such thing as the rules of war. In fact, we know that simply because the IBA
Rules do not speak in detail to many issues, it does not mean that tribunals are not
regularly confronted with diffi cult questions about evidentiary procedure.
Thus this book was born out of a research project that had as its primary goal
identifying common solutions to common problems relating to the taking of
evidence. From this genesis, my research evolved into primarily a commentary on
the IBA Rules of Evidence, with added considerations of related rules and issues.
This is so because it is clear that the best way to cover this topic is to begin fi rst
with those rules that exist and work from there. In this regard, this book takes
the view that the IBA Rules of Evidence should be seen as codifi ed soft-law
standards, or as we might refer to them in US legal parlance, restatements of rules
of evidence. Working from this assumption, the commentary below considers the
common interpretations that are given to the Rules, and also attempts to cover
the issues that are not addressed by them.
To give substance to the analysis of these questions, each chapter emphasises the
jurisprudence of international arbitral tribunals. While it is true that there is no
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